Banking Essay Example | Topics and Well Written Essays - 500 words

Banking - Essay ExampleAlternatively, Cebenoyan and Strahan (2003) investigated how active management of bank credit risk exposure through the add sales market affected capital structure, lending, profits, and risk in the USA. Their findings were that banks which improve on their ability to manage credit risk may have great leverage, and subsequently may lend more of their assets to risky borrowers.Sathyes hypothesis was that the mean efficiency scores of Indian banks (i.e., publicly, privately or foreign owned) would be contrasting to each other. Using three groups allowed Sathye to compare all three form s of banks that exist in India. And comparison data can determine if differences in efficiency are in fact real, or due to chance. Using financial ratios as the DV, Sathye also used archival data from the latest on tap(predicate) publications for the year 1997-98 compiled by the Indian Banks Association (IBA, 1999). She used the non-parametric test while the non-parametric appr oach is Data Envelopment Analysis (DEA). The test itself is suitable in that it is recognised to be robust for efficient frontier estimation. And it is a popular tool for the evaluation of the efficiency of a number of producers. DEA can be used with octuple input and multiple output models also.